HaiKhuu Daily Report 10/23/2023
Good morning, and happy Monday! I hope you all have had an amazing weekend and are ready to see some blood in the markets. At the time of writing this report, $SPY has broken the $420 psychological support and is looking extremely bearish. We have broken into extreme fear, which is not a good sign in the short term but is the reason why I’ve continually advised to allocate into value organizations.
There is a lot of risk involved with attempting to capitalize on these current market conditions, so please be cautious if you are attempting to trade these current market conditions. Obviously, take advantage of the opportunities that are available to us, but understand the amount of risks that are involved as a result of this increased volatility and weakness in the markets.
The best way to navigate these conditions is not to attempt to time out the bottom perfectly but to simply allocate into value and wait until there is a confirmation of a reversal in the markets.
We should see some beautiful bullish momentum in the markets soon, but it is just a matter of remaining consistent and solvent while the markets are irrational.
Good luck trading trading this week. This should be an interesting time that will generate a significant amount of gains and losses across the board.
Side note: Monday, Tuesday, and Thursday are historically bullish, while Friday is historically bearish, which is the anniversary of the 1929 market crash.
The updated $SPY daily levels are as follows:
Conversion Line Resistance: $428.12
Base Line Resistance: $431.54
Weak Psychological Resistance: $430
Strong Psychological Support/Resistance: $420
Daily Cloud Resistance: $445.13
$SPY Daily Candles - Breaking Psychological Support & Making a NEW 4 MONTH LOW [10/20/2023]
Thoughts & Comments from Last Week
Last week was a tough week for the overall markets as a result of weakness and fear coming back into the markets, and organizations like $TSLA and $NVDA, which have been highly overpriced, are coming back down to reality. We watched as $SPY dropped almost 3% over the entire week and watched as it was the most consistent selling we’ve seen in the markets since the beginning of August.
Monday was an alright day for the general markets as we remained relatively neutral, testing the daily baseline resistance. Markets did not move much despite having a significant amount of general confidence about the location in the markets. We opened the day trading at $433.82, made a high of the day at $437.14, and came back to close above the daily baseline resistance, ending the day trading at $436.04.
Tuesday was a more interesting day as this was the final day of general confidence in the markets. We opened the day down significantly from the previous close, opening the day trading at $432.81, showed signs of weakness as we opened significantly below the daily support that was built, and watched as the markets rallied from open to make the official high of the day trading at $438.14, and come back down, to close above the daily baseline resistance again, ending the day at $436.02, with a significant intraday movement, but a negligible day to day movement.
Wednesday is when the weakness started to set in the markets, as we consistently were testing that daily baseline resistance, and it was finally showing signs of a reversal and rejection at that level. Wednesday started the day looking relatively optimistic, opening the day trading at $434.19, down slightly from the previous close but showing signs of a possible break out; we made a high of the day testing that daily baseline resistance once again and came down intraday to test the conversion line support, and ending the day trading at $430.21, slightly above that resistance, but showing signs of extreme weakness in the process.
Thursday was a disgusting day overall for the markets as a result of weakness in the markets. We had $TSLA earnings and $NFLX after hours on Wednesday, which caused $TSLA to come down significantly, display weakness across the board, and cause panic across the board. We started the day with $SPY opening the day slightly green, trading at $430.95, remaining relatively optimistic for the morning, but showing a significant amount of fear in high-beta, overpriced speculative equities, and this fear tested people’s faith in US-Equities. $SPY moved up to make the official high of the day trading at $430.95, and coming down significantly in the process, rejecting the daily conversion line support, making the low of the day testing the $425 psychological support, and ending the day trading at $426.43, well below the conversion line support.
Friday was a tough day for the markets to end the week. We started the day looking relatively neutral, opening the day at $425.87, down slightly from the previous close, but looking optimistic as there was potential for the markets to move back up and to come test the daily conversion line again, but unfortunately, that was not what happened. Right after opening, we made an official high of the day trading at $426.54 and watched as the markets continually sold throughout the entire morning, slowing down from the lunchtime lull, making relatively low trading around $422. Once we bounced off of $422, there was a little bit of strength as volume and buying came back into the markets, where we went up to test $424 and ultimately rejected that level going into close, selling off into powerhour, and continually making new lows of the day. We ended the day with $SPY making its official low trading at $421.08 and closing the week trading at $421.19, down $5.24 for the day, or down approximately 1.23%, with a significant amount of weakness in the markets as even after close, selling continued and displayed many signs of weakness in the process.
As I said before, we had a terrible week for the markets, mostly as we watched as $SPY dropped almost 3%, $QQQ dropped over 3%, $NVDA dropped almost 9%, and $TSLA dropped almost 16% last week. This is the sign of weakness I have been talking about over the previous couple of weeks, and I hope you all have been preparing accordingly and practicing safe risk management in the process, as many of these highly overvalued tech organizations are coming back down to reality, it will bring retail sentiment down, and create a significant amount of fear in the process. Look for opportunities to buy fundamentally solid organizations that are undervalued now, and use this opportunity to capitalize on the momentum in the markets.
We all hope you did alright trading last week, and did not realize a significant amount of losses, and let’s see what this week has in store for us!
Heatmap - $SPY [10/16 - 10/20]
Thoughts & Comments for Today, 10/23/2023
Today is going to confuse a lot of traders and create a significant amount of either losses or gains, depending on which direction you ultimately decide on trading. With the way the markets currently sit, this may sound simple, but we will either move up or come down. Obviously, everyone knows this, but in reality, there is a lot more to that statement.
If you are attempting to trade this momentum in the markets, I would advise extreme caution right now and to practice extreme risk management. We are going to see extremely large movements in either direction, and it will make trading extremely difficult for the majority of traders.
$SPY is currently trading below $420 at the time of writing this report, and the sentiment is looking weak and bearish at the moment, but despite this, we can easily and realistically move back up to $420 and break out, or we can respect the sell-off, and ultimately continue to come down. As I have been saying before, do not look to be overly bullish or bearish in these market conditions, but look to take advantage of the momentum in the markets and look to maximize profits when given an opportunity to do so.
Assuming that you are attempting to actively trade the momentum today, here are a couple of things to think about. If the markets start selling, I would not advise you to attempt to short unless you see a clear sign of market momentum starting to shift and are able to time out the top perfectly. The safest move would be to wait until we find what is a relative bottom in the markets and watch until we see a confirmation of a reversal, then attempt to go long. Safety is going to be key, mostly in these market conditions, if you are attempting to capitalize on the markets in the short term.
If you are not attempting to trade in these market conditions but are looking to continually capitalize on the opportunities that are presented to us, there are multiple ways you can easily capitalize on this movement in the markets while limiting your general risk and exposure.
The first recommendation I have is to look to sell premiums against equity you are confident in. Volatility is at a relative high, and if you want to capitalize on the increased premium while still having cash “set” aside, selling cash-secured puts on equities, you are comfortable holding at a strike price you are happy holding it at will generate a sizable return with relatively minimal risk.
The other recommendation I have is to attempt to allocate into value. I know I’ve been talking about value for a while now at this point, but value and safety plays are going to be the best way to allocate into the markets and minimize the general risks that are involved. If you are buying organizations that right now are fundamentally undervalued, and you are comfortable and confident holding at this current price, if the price drops a little more, it will provide you with an opportunity to purchase and increase your exposure while at the same time, limit your general downside risk in comparison to high beta tech organizations that ultimately will move more drastically than the markets. Once institutions start to sell their speculative higher-risk tech organizations and allocate more towards value positions they do not anticipate selling; we will see continued selling in tech and a solid increase in purchasing in deep value.
For my positions today, I do not anticipate attempting to trade too heavily. I want to attempt to capitalize on a possible bounce and breakout with $SPY trading around $420, but at the same time, there is a significant amount of risk in the markets that I do not want to have exposure to at the moment. I will attempt to play the upside momentum, but I will not be looking to increase exposure by a significant amount. I’ll have stops set in place in case we see selling across the board, and I plan to continually increase my general exposure in the markets despite the markets coming down in organizations I am comfortable and confident holding at these prices. These organizations, at the moment, are $F, $GM, $DIS, and $KO.
Please just continue to practice safe risk management in these market conditions, though. Lots of traders are going to have an extremely difficult time navigating these market conditions with confidence, so minimize risk and look to capitalize on the opportunities that are presented to us.
If you want to watch any of my allocations, they will be posted live in the HaiKhuu Discord.
HaiKhuu Proprietary Algorithm Report:
Last week was a tough week for the markets and as a result, the long-term portfolio and base algorithm. It is nice to see that in tough market conditions, our neutral strategies are continuing to perform as expected, and I am happy to see this. We are still performing a live beta test on the algorithm we have and are anticipating to remain in beta this week as we want to see continued performance of this algorithm at this time to maximize the potential for the organization. We hope to lift this beta soon and to have a fully functioning algorithm we are comfortable and confident in. It just depends on market conditions and the performance of this algorithm.
To get an in-depth analysis of our algorithms' performance, check out Asher’s Report!
The results of last week are as follows:
Baseline:
$SPY: -1.84%
Our Results:
Variable Sector Neutral: +0.56%
Sector Neutral: +0.41%
Market Neutral: -0.09%
Variable Market Neutral: -0.13%
Long Term Portfolio: -1.64%
Base Algorithm: -2.09%
As I’ve said before, we are running a live beta test with our newest algorithm. These systems outperformed previous systems, and we are excited to see what happens, but at the same time, we are not blindly endorsing entries into any of these positions. This is all still a live beta test, and we cannot guarantee its success or state that we have 100% blind confidence in our processes.
We do recommend you do some due diligence with any of these positions but actively watch and allocate when you personally have confidence that lines up with our systems.
The best way to allocate is to find a beta weight you are comfortable taking on in the short term and find an allocation from the list with a larger allocation %, as that is going to signify more confidence in the position versus a lower % allocation. As always, practice safe risk management and limit your downside risk by setting stops on the positions accordingly.
DISCLAIMER - This is not financial advice. Utilize these trades with caution. These predictions are generated via our proprietary trading algorithm without taking into account market conditions, news, or any external biases. This is not a signal to buy or sell any equities, and we do not guarantee success. Take these at your own risk.
Algorithmic Alerts for 10/23/2023
My Personal Watchlist :
Note, just because something is on my watchlist does not mean it is a signal to buy or sell any equities
Watchlist:
$SPY , $KO , $DIS , $F , $GM, $NVDA , $TSLA
Position Opportunities:
Follow the market momentum
Limit your downside risk
Allocate into strong value organizations
LONG OPPORTUNITIES:
Long-Term Dividend - $GAIN / $JEPI
Long-Term Investment - $DIS / $DG / $KO
Long-Term Auto Sector - $F / $GM
Economic News for 10/23/2023
Chicago National Activity Index - 8:30 AM ET
Notable Earnings for 10/23/2023
Pre-Market Earnings:
Royal Phillips (PHG)
Dynex Capital (DX)
After-Market Earnings:
Cleveland-Cliffs (CLF)
Cadence Design Systems (CDNS)
Logitech (LOGI)
Whirlpool (WHR)
W.R. Berkley (WRB)
Crown Holdings (CCK)
Packaging Corp. (PKG)
Wrap up
Overall, this is going to be an extremely interesting time for the markets. Watch out for $SPY $420 and look to capitalize on the opportunities that are available to us while minimizing general risks. Practice safe risk management but look to continually maximize the profits you are able to generate in these market conditions. The best traders will have a difficult time, and the worst traders are going to be oblivious to these current conditions.
Be smart, be safe, and just remain liquid and solvent during these difficult times.
Good luck trading this week, and let’s do everything we can to maximize our returns, while minimizing risk and exposure.